Santos puts Hunter CSG on hold

Santos appears to be mothballing its plans for CSG drilling in the Hunter.

ABC News - file image

Gas company Santos appears to be mothballing its plans to develop coal seam gas in the Hunter Valley.

Last week the company announced it will focus on developing its site in the Pilliga region within the state's north west.

To date, the company has drilled seven holes within the Upper Hunter Shire.

At its Bunnan site the company has identified a potential core hole but is yet to drill.

Community Relations Manager Sam Crafter says Santos has scaled back its plans to search for more sites.

"What we had planned on was a broad exploration program to continue to gather knowledge across the area of north west New South Wales and the Hunter where we're looking at operating," he said.

"Again a lot of those areas are really at that first stage of exploration where it's really about understanding whether there's coal in the ground and whether there's potential any future to continue to even look there."

Mr Crafter says the company is yet to conduct a promised water study of the region.

"It would be silly to start out on a project for a small study," he said.

"If we work with some other agencies, potentially with the government or other agencies and try and come up with a better understanding across the region and across the catchments.

"So what we're doing at the moment is investigating all the options to try and put in place a study or some sort of process to enable us to have a lot better knowledge of the water in the region before we continue with our activity."

Committee member for the Save Bunnan group, Paula Stevenson says she believes Santos will leave the project dormant for at least two more years.

Ms Stevenson says the Community Consultative Committee set up to facilitate dialogue with Santos on its operations in the region is expected to disband later this month.

"If they're now not going to be actively involved in this PEL there's no point meeting with them and discussing absolutely nothing, so I think that the last meeting will be July," she said.

"They're not really agreeing to a full time water study, which the committee was asking for, so I would suspect that the committee would just be suspended until further notice."

Ms Stevenson says while she is pleased by the news the company is halting operations, she considers it temporary.

"It's kind of good that they're retreating from this area but it's only for about two years, they say they might return in 2015.

"We know that their exploration license is very much alive and active so they certainly have the ability to return so we won't be relaxing our efforts at all."